http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 6  

PETITIONER: PREM NATH SHARMA

       Vs.

RESPONDENT: STATE OF U.P AND ANR.

DATE OF JUDGMENT:       09/04/1997

BENCH: CJI, J.S. VERMA, B.N. KIRPAL

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T KIRPAL, J.      The appellant  had, under  the  provisions  of    Uttar Pradesh Minor  Minerals (Concession)  Rules, 1963 (for short ‘the Rules’)  on 17th  September, 1977, been granted a lease of a  plot of  land admeasuring  10 acres  in Mahoba Tehsil, Hamirpur District.  This lease was for a period of ten years and on  the basis  thereof the  appellant set  up a  granite unit.      The aforesaid lease was extended from time to time. The tenure of  the lease  having expired  a public  notice dated 31st March,  1995 was  issued by  the  District  magistrate, Hamirpur for  grant of  a fresh lease for the area which was being exploited  by the appellant. This notice was published on 2nd  April, 1995  and was  issued under  Rule 72  of  the Rules. Rule  72, as  it stood  at the  relevant time. was as under:-      " Availability   of  area  for  re-      grant to  be notified--  (i) If any      area, which was held under a mining      lease  under   Chapter  II   or  on      reserved under  Section 17-A of the      Act, becomes available for re-grant      on  mining   lease   the   District      officer    shall     notify     the      availability of  the area through a      notice  inviting  applications  for      grant of  mining lease specifying a      date, which  shall not  be  earlier      than thirty  days from  the date of      the notice  and giving  description      of such  area and  a copy  of  such      notice shall  be displayed  on  the      Notice  Board  of  his  office  and      shall also be sent to the Tehsildar      of such area and the Director.      (ii) The  application for  grant of      mining  lease  under  sub-rule  (1)      shall  be   received  within  seven      working   days    from   the   date

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 6  

    specified in the notice referred to      in the  said sub-rule. If, however,      the number of applications received      from any  area is  less than three,      If,   however,    the   number   of      applications received from any area      is less  than three,  the  District      officer  may   further  extend  the      period for  seven more working days      and if  even thereafter, the number      of applications  remains less  than      three, the  District Officer  shall      notify the availability of the area      afresh in  accordance with the said      sub-rule.      (iii) An  application for  grant of      mining lease for such area which is      already  held   under  a  lease  or      notified under sub-rule (1) of Rule      23 or  reserved under  Section 17-A      of the  Act and  whose availability      has not  been notified  under  sub-      rule (1),  shall be  premature  and      shall not  be  considered  and  the      application fee  thereon,  if  paid      shall be refunded."      According to  Rule 72  (ii), the  applications for  the grant of  a mining  lease were  to be  received within seven days from  the specified  date. it is common ground that the specified date.  it is common ground that the specified date as  per   the  aforesaid   notice  was  2nd  May,  1995  and applications for  the grant  of mining lease  could be filed between 2nd May, 1995 and 9th may, 1995.      It appears  that on the very first date, i.e., 2nd May, 1995, nine applications including that of the appellant, for the grant  of the  mining lease  were  filed.  The  District Magistrate vide  his order dated 6th May, 1995, informed the appellant that his application for grant of the mining lease had been  approved. The  appellant was required, in token of acceptance of the terms of the lease, to submit an agreement along with  a treasury  challan of Rs.30,000/- to enable the execution of  the lease deed. According to the appellant the needful was done and the stamp papers worth Rs.30,065/- were furnished to  the office  of the  Mines officer on 12th May, 1995 so  as to enable the District magistrate to execute the lease deed in favour of the appellant.      The District  Magistrate did  not, however, execute the lease deed.  Thereupon, the  appellant filed  writ  petition No.15290/95 seeking  a writ  of mandamus requiring the court to direct  the respondents therein to execute the lease deed in  the   appellant’s  favour   pursuant  to   the  sanction communicated to  the appellant  vide order  dated  6th  May, 1995.      During the  pendency of the aforesaid writ petition the District Magistrate,  Mahoba, issued  a  fresh  notification dated 30th  may 1995. According to the respondents the state Government had  arrived at  the conclusion  that  the  first notice dated 31st March, 1995 was not in accordance with the provisions of  Rule 72  inasmuchas the  seven days  time for acceptance of  the application for grant of the mining lease as contemplated  by Rule  72 inasmuchas  the seven days time for acceptance  of the  application for  grant of the mining lease as  contemplated by  Rule 72  was not mentioned in the notice and  , therefore,  the order  dated 6th  May  ,  1995 sanctioning the lease was cancelled and a fresh notice dated

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 6  

30th May  1995 was issued.  This led to the appellant filing a second  writ petition  No.16886 of  1995  challenging  the fresh notice dated 30th May, 1995. it appears that one other applicant, namely, Achintya Kumar Tripathi also filed a writ petition No.  15338 of  1995, seeking  a  writ  of  mandamus restraining the respondents from executing a lease in favour of the appellant herein and he also prayed for a restraining the respondents  from executing  a lease  in favour  of  the appellant  here in and he also prayed for a direction to the respondent to grant the mining lease in his favour.      The Division Bench of the High Court by common judgment dated 24th  April, 1996  dismissed the three writ petitions. It  came   to  the   conclusion  that   the  requirement  of communicating in  the  notice  that  application  for  grant mining lease  under Rule  72 (i)  shall be  received  within seven working days from the date specified in the notice was mandatory .  In view  of  the  fact  a  that  this  was  not specified, therefore,  the notice dated 31st March, 1995 had not been issued in accordance with the provisions of Rule 72 and, consequently,  respondents were  right in not acting on the basis of the said notice and executing the lease deed in favour of  the appellant.  The High  Court did  not think it necessary to  consider the  claim of Achintya Kumar Tripathi in his writ petition. Direction was issued that as the fresh notice dated  30th may,  1995 had  expired  the  respondents should  issue   a  fresh   notice  in  accordance  with  the provisions of Rule 72 and invite fresh applications.      Challenging the  correctness of  the aforesaid decision of the  Allahabad High Court it was submitted by the learned counsel for  the appellant that Rule 72 did not require that the notice should itself specify the dates when applications for lease  could be submitted. He further contended that the appellant had  been exploiting  he mines since 1977 till the expiry of  the last lease on 31st March, 1995. The appellant was a  mechanical engineer and had pursued higher studies in UK and  he had invested a huge amount of money in setting up the   requisite   machinery   and   in   building   up   the infrastructure for  carrying out  the mining operations. He, therefore, had  a preferential  right to get the lease under sub-rule (1) of Rule 9 of the Rules.      Notice for  the grant  of mining  lease is issued under sub-rule (i)  of Rule  72. This sub-rule requires the notice to  invite   applications  for   re-grant  of  mining  lease specifying a  date which  was not  to be earlier than thirty days from  the date of the notice. The notice is required to give the  description of  the area where the re-grant of the mining lease is available. Sub-rule (i) does not require the period within  which the  application for grant of lease can be filed  or the  last date by which the application will be received to  be specifically  stated in  the notice which is issued. The  reason for this is that the period within which the application for grant of lease can be filed is specified by  Rule   72  (ii)   itself.  As   per  this  sub-rule  the applications are  to be  received within  seven working days from the  date specified  in the  notice. The date which was specified in  the notice  dated 31st March ,1995 was that of 2nd May,  1995 was  that of  2nd May, 1995. If the number of applications are less than three then this sub-rule requires the District  officer to further extend the period for seven more working  days. If  again  the  number  of  applications remains less  than three  then the  availability of the area has to  be notified afresh. In our opinion, while mentioning of the  dates within which the applications may be filed may be desirable  but non mentioning of the same will not in any way invalidate  the said notice. Reading the rule as a whole

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 6  

it is  only the specified date which has to be stated in the notice, Reading  the rule  as whole it is only the specified date which  has to  be stated in the notice, which cannot be earlier than  thirty days  of the  notice, and  the date  on being so notified sub-rule (ii) of Rule 9 clearly stipulates the period  within which the applications can be filed, that period being  of seven days. The High Court, in our opinion, was  therefore,   1995  to   be  bad  because  of  the  non- specification of  the seven  days period  within  which  the applications could be filed.      There is, however, one other reason why no relief could have been granted to the appellant. As we have already noted by notice  dated 31st March, 1995 the specified date was 2nd May, 1995.  On that day itself nine applications were filed. According to sub-rule (ii) of 72 applications could be filed during a  period of  seven days, i.e., by 9th May, 1995. The District Magistrate  did not,  however ,  wait and  by order dated 6th  May, 1995  he communicated  to the appellant that grant of  lease in  his favour gad been sanctioned. This the District Magistrate could not do. He was under an obligation to entertain  applications for  the grant  of  lease  for  a period of  seven days  after the  specified date, i.e., till 9th May, 1995. it is only  after the period of seven days is over  that   the  District  Magistrate  could  consider  the applications received  before deciding  as to whom the lease should be granted.      It  was  submitted  by  the  learned  counsel  for  the appellant that  the appellant  had a  preference to  get the lease and  in fact  on the very first date itself, i.e., 2nd May, 1995  nine applications  were received.  It was further submitted that  even though by order dated 6th May, 1995 the appellants  application  was  approved  in  actual  fact  no further applications  were received  till 9th  May, 1995  or even thereafter.  It was,  therefore, submitted  that by not waiting till  after 9th  May, 1995 and by according sanction on 6th  May, 1995  the District  Magistrate had committed no illegality.      In order  to appreciate  the aforesaid submission it is necessary to  examine Rule  9 under  which the  preferential right is  claimed by the appellant relevant portion of which is as under:      "    Preferential right  of certain      person-(1) Expect  as  provided  in      sub-rules 92)  and 93) where two or      more persons  have  applied  for  a      mining lease in respect of the same      land,    the     applicant    whose      application  was  received  earlier      shall have a preferential right for      the  grant   of  lease   over    an      applicant  whose   application  was      received later.           Provided   that   where   such      applications are  received  on  the      same day, the state Government may,      after taking into consideration the      matters specified  below grant  the      mining lease  to such  one  of  the      applicants as it may deem fit:      (a)  past experience;      (b)  financial resources;      (c)  nature  and   quality  of  the           technical staff  employed   or           to   be    employed   by   the           applicant;

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 6  

    (d)  the conduct  of the  applicant           in   carrying    out    mining           operations on the basis of any           previous lease  or permit  and           in complying  with, conditions           of such lease or permit or the           provisions  of   any  law   in           connection therewith; and      (e)  such other  matters as  may be           considered  necessary  by  the           state Government.      (2) The  State Government  may, for      any special reasons to be recorded,      grant  a   mining   lease   to   an      applicant  whose   application  was      received later  in preference to an      applicant  whose   application  was      received earlier.      (3)  In respect of mining lease for      excavation.........."      Sub-rule (1)  of Rule  9 states  that where two or more persons apply  for a  mining lease  in respect  of the  same land, then  the application   received  earlier shall have a preferential right  for the grant of lease over an applicant whose application was received later. But this is subject to the provisions  of sub-rule  (2) and sub-rule (3) of Rule 9, to which we will presently refer.      The proviso  to sub-rule  (1) deals  with  a  situation where two  or more  persons apply  for  a  mining  lease  in respect of the same land on the same day. In such a case the state Government  had to take into consideration the matters specified in the said proviso before deciding as to whom the lease  is   to  be   granted.  In   the  present  case  nine applications were  received on 2nd May, 1995. Including that of  the   appellant.  In   those  circumstances   the  state Government was  required  to  act  in  accordance  with  the provisions  of  proviso  to  sub-rule  (1)  of  Rule  9  and presumably, it took into consideration the factors mentioned therein while  deciding on 6th May, 1995 to grant the mining lease to the appellant.      While an  application received earlier in point of time has a  preference over  a later  application, as provided by sub-rule(1) of Rule 9, nevertheless the State Government has been given the power under Sub-rule (2) of Rule 9 to grant a mining lease  to an applicant whose application was received later in  preference to an application whose application was received earlier.  This can be done for special reason which have to be recorded. in other words, an application received earlier in point of time will normally get a preference over an application received later but the earlier applicant does not get  an undefeasible  right to get the lease because the state Government,  under sub-rule  (2) of  Rule 9,  has  the power to  accept an  application which  is received later in point of  time. Similarly  an applicant  under sub-rule (3)_ will be  given preference  to an  applicant under Rule 9 (1) even though  his application may be  later in point of time. we, however,  make it  clear that  a later application which could be  considered under  sub-rule (2) or cub-rule (3) can only be  that whose  application which has been filed within the  period   specified  by  Rule  72(ii).  For  example  an application received  after 9th  May, 1995,  pursuant to the earlier notice  dated 31st  March, 1995, could not have been considered by the State Government either under sub-rule (2) or(3). An  application received  after the prescribed period of time will not be regarded as a valid application, but all

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 6  

applications received  within the  seven days  period, i.e., 2nd May,  1995 to  9th May,  1995 in  this case,  had to  be considered.      Even though nine applications were received on 2nd May, 1995 the State Government was not precluded from considering or even  granting lease  in favour  of  an  applicant  whose application was received later provided the conditions under sub-rule (2)  or sub-rule  (3) in  his case  was held  to be satisfied.  This   being  so   no  decision   accepting   an application could have been taken by the District Magistrate by considering  the preference  under Rule  9(1) before  the period of  seven days  had elapsed. Had order dated 6th May, 1995 not  been passed,  it is possible that a more deserving applicant than  the  appellant  herein  may  have  filed  an application by  9th May,  1995 on the consideration of which the state  Government ,  for reasons  to the recorded, could have been  pursuaded to  grant a  mining lease.  A provision like  sub-rule   (2)  of   Rule  9  had  necessarily  to  be incorporated so  that the  application of the most deserving applicant was  not rejected  merely because the applications of the  other applicants  were received earlier. For example if in  the instant  case for reasons beyond its control, the appellant had  not been able to file the application for the grant of  the mining  lease on  the very  first date itself, i.e., 2nd  May, 1995,  when eight  other  applications  were received but  had filed its application say on 3rd may, 1995 then his application being later in point of time, would not have been  considered but  for the  provisions contained  in sub-rule (2)  of  Rule  9.  This  sub  rule  ,  in  such  an eventuality would  have enabled the applicant to satisfy the State Government  that for special reasons preference should be given  to his  application and  the mining  lease granted notwithstanding  that   eight  other   persons  had  applied earlier.  The   opportunity  granted  by  Rule  72  (ii)  to prospective applicants  to apply  for  a  mining  lease  was denied when  within  four  days  of  the    receipt  of  the application the  District Magistrate on 6th May, 1995 took a decision whereby  he decided to grant the lease in favour of the appellant. This could not be done.      From the aforesaid discussion it will follow that it is not the  notice dated  31st March,  1995 which suffered from any  legal  infirmity  but  it  is  the  acceptance  of  the application before  9th May,  1995 which was bad in law. The said order dated 6th May, 1995 being contrary to Rule 72(ii) was rightly  not acted  upon and, therefore, the only course which was  open to  the respondents  was to  issue  a  fresh notice, which  it did  on 30th  May, 1995. The conclusion of the  High  Court  that  the  writ  petitions  filed  by  the appellant could  not be  allowed was  correct, though  for a different reason.      For the  aforesaid reasons these appeals are dismissed. The respondents  will be  at liberty to issue a fresh notice for the grant of lease in accordance with law and keeping in view the  observations contained  herein. There  will be  no order as to costs .